Turkey Set To Pilot CBDC In 2021 Amid Inflation Distress

Turkey set to pilot CBDC in 2021 amid inflation distress. In an announcement to members of Turkey’s Parliament central bank governor Naci Agbal disclosed that “conceptual” research was completed on a Turkish central bank digital currency (CBDC). He also noted that practical tests for such a currency would begin in the latter half of 2021.  This comes as the country struggles with increasing consumer prices and an inflation rate in the double digits.

“There is an R&D project initiated on digital money,” said Agbal, according to two local outlets. “Currently the conceptual phase of this project has been completed. We aim to start pilot tests in the second half of 2021.”

The announcement may came as a surprise to some, however, Turkey was researching a possible CBDC since mid-2019. Additionally, a 2021 rollout of a digital Lira would actually be something of a delay — in November of 2019 Turkish president Recep Erdoğan announced that tests for a digital Lira system would be finished by the end of 2020.

The progress on a CBDC comes as the country’s central bank grapples with inflation as high as 14%. In a statement to reporters last week, Agbal, who was appointed as the central bank’s head just last month, said that the bank is “determined” to lower inflation and meet a year-end target of 9.4%.

[image: Mar Cerdeira]

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